Q.1: What is meant by Public Finance?
Ans: Public Finance can be defined as government revenue government expenditure government debt and its management.
Q.2: What is meant by Private Finance?
Ans: The study of the nature of an individual income expenditure and debt is called Private Finance.
Q.3: State the Canon of taxation.
Ans: 1) Canon of Equality 2) Canon certainty 3) Canon of Convenience 4) Canon of Economy
Q.4: Define Direct Tax.
Ans: Direct tax means the tax is paid by the person to whom it is levied it means the burden of this text cannot be shifted to anyone else. For example, Income Tax, Property Tax, and Wealth Tax
Q.5: Define Indirect Tax.
Ans: Indirect Tax means the tax is not paid by the person to whom it is levied it means that the burden of the tax is shifted to another person. For example, Sale tax and Import Tax.
Q.6: What is meant by Progressive Tax?
Ans: A tax in which the rate of tax increases with the increase of the level of Income is called the progressive tax. In Pakistan, Income tax is a progressive tax.
Q.7: What is meant by Proportional Tax?
Ans: A tax in which the rate of tax remains the same on every level of income is called proportional tax
Q.8: What is meant by Regressive tax
Ans: Regressive tax means that at lower income level taxpayer pay tax at the higher rate and at higher income level taxpayer pay tax at lower rates. It means the rate of tax decreases with the increase in income and vice versa.
Q.9: Define Canon of Equality of taxation.
Ans: It means that all individuals pay taxes in accordance with their incomes. Thus, the canon of equality does not mean that every individual pays the same amount of tax. In fact, it means everybody should equally sacrifice for public finance.
Q.10: Write down the kinds of taxes.
Ans: The following are the kinds of taxes.
1) Direct tax
2) Indirect tax
3) Proportional tax
4) Progressive tax
5) Regressive tax
6) Value added tax (VAT)
Q.11: What is mean by Budget?
Ans: Account of income and expenditure is called a budget.
Q.12: What is meant by Surplus budget?
Ans: When the revenue of the government is more than its expenditure then it is a surplus budget
Q.13: What is meant by Deficit budget?
Ans: When the revenues of the government are less than its expenditure then it is called deficit budget.
Q.14: What is meant by the Balanced budget?
Ans: When the revenues of the government are equal to its expenditure then it is called a balanced budget.
Q.15: What is meant by Revenue budget?
Ans: The revenue budget is a budget in which revenue collected from different kinds of taxes is shown.
Q.16: Define Capital budget.
Ans: The capital budget is a budget in which such expenditures are explained which cause an increase in capital goods.
Q.17: What are kind of Public expenditure?
Ans: There are two kinds of public expenditure.
1) Development expenditure 2) Non-Development expenditure
Q.18: Write kinds of public budget.
Ans: 1) Revenue budget 2) Capital budget
Q.19: What is meant by fee?
Ans: The government provides some direct services to the people and charge money in return for these services, it is called fee.
Q.20: Differentiate between fee and tax.
Ans: Fee is the reward of government services from which the peoples are benefited while the taxpayers cannot demand from direct personal benefit from the government in return for payment of tax.
Q.21: Define Excise duty.
Ans: The text which is imposed on domestically manufactured goods is called excise duty.
Q.22: What is meant by Tax?
Ans: Tax is a compulsory payment made by the people to the government treasury to meet the expenditure of government for the common benefit of the people.
Q.23: write four main sources of public revenue
Ans: 1) Taxes 2) Fee 3) Price 4) Special Assessment
Q.24: Write four heads of public expenditures.
Ans: 1) Police 2) Courts 3) Health and Education 4) Civil Administration